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Jul 04, 2013

Investors optimistic in North America, less so in China

Investor sentiment surveys point to mixed global picture

Recent surveys portray US and Canadian investors as a reasonably happy lot, confident about the current equity picture and optimistic about their own future.

In the US, the John Hancock Investor Sentiment Index reached all-time highs in the second quarter while a similar poll released by John Hancock parent Manulife Financial reveals equally positive feeling among Canadian investors, especially younger ones.
Enthusiasm for equities is sharply up from a year earlier among the 1,078 ‘affluent’ investors in the John Hancock poll. Sixty-two percent believe it is a good time to invest in stocks, up from 48 percent in the second quarter of 2012. Only 23 percent say it is a good time to invest in bonds, even lower than a year ago when 27 percent felt that way.
About a quarter of investors surveyed think blue chips will perform best over the next six months, up from 21 percent a year ago. One in five thinks small caps will do best, whereas only 16 percent thought so in the second quarter of 2012.
The survey also notes that while healthcare policy issues dominate investor concerns, worries about the national debt are diminishing.
Meanwhile, in Canada, younger investors (aged 25-34) are behind a solid two-point surge in the Manulife sentiment index. That optimism isn’t being directly translated into retirement investment, however.

While encouraging ‘good savings discipline’, the Manulife report notes Canadian financial priorities have shifted to spending economically and paying down debt. Fewer than one in 10 Canadians indicate that saving for retirement is a financial priority this year.

China’s regret

Financial priorities are reversed in Hong Kong where Manulife, which begun polling Asian investor sentiment earlier this year, finds ‘save for retirement’ ranking highest on local to-do lists.

Still, while regional investor sentiment has trended upward in Indonesia, Malaysia, Singapore and Japan, the Canada-based financial services group says views are less positive in Hong Kong, Taiwan and China.

Separate surveys conducted by local pollsters find investor confidence has dropped to historical lows on mainland China stock exchanges.

In June, the benchmark Shanghai Stock Exchange Composite Index slumped almost 14 percent, its biggest retreat in four years, while a survey of almost 10,000 individual investors conducted by China Finance Online found almost half feel ‘ashamed’ to even admit they are stock market investors.